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MPs clash with Crombie on pay

MPs have criticised Standard Life group chief executive Sandy Crombie for agreeing to bonus payments which they claim contradicts a pledge that he made to them.

Mutuo, a research group which acts as secretary to the All Party Parliamentary Group for Building Societies and Financial Mutuals, says Crombie told the group in 2004 that he would not renegotiate his package after Standard’s demutualisation.

But Standard says Mutuo has not understood the remuneration details. It says no new award has been made but cash incentives agreed last year have been converted to share-based incentives.

Standard says the incentives – worth up to 6.8m presently for directors – are the maximum possible windfall, depending on strict performance criteria being met, and create best practice by aligning the interests of senior management with shareholders. Standard directors could get almost 2.8 million shares, with Crombie potentially being granted up to 952,716 shares – currently worth around 2.4m. Life and pensions chief executive Trevor Matthews could get 393,184 shares while finance director Alison Reed could pick up 335,925 shares.

But Mutuo chief executive Peter Hunt says Crombie should have been more open with the group about the personal financial ben-efits that he would get from demutualisation.

Hunt says: “We need to create a statement of best practice to ensure that members are fully aware of who really benefits from demutualisation.”

Standard Life group deputy chairman Gerry Grimstone says: “Everybody should be delighted if we end up paying out these bonuses because it will mean there has been a drastic improvement in the group’s performance over the period of the plan.”

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